Excess Returns Podcast Summary

Episode: What a Global Regime Change Means for Investors | Julian Brigden
Date: October 9, 2025
Guests: Julian Brigden (Macro Intelligence Partners), Hosts: Jack Forehand, Justin Carbonneau, Matt Zeigler

Overview

This episode features macro strategist Julian Brigden, co-founder and president of Macro Intelligence Partners, in a deep-dive discussion on the current state of global markets and what a significant macroeconomic "regime change" could mean for investors—particularly those heavily invested in the US. The conversation covers the shifting macro landscape, the role of the Fed, outsized international investment, currency pressures, inflation prospects, labor market realities, investment regimes, and the dangers and opportunities presented by AI and passive investing. Brigden’s often contrarian, candid perspective makes for a provocative guide to navigating global capital flows and portfolio positioning in 2025 and beyond.

Key Themes & Discussion Points

1. The Role and Value of Macro Analysis in Investing

• Brigden emphasizes that macro is often a supporting actor in markets, but at major tops and bottoms, it plays a central and decisive role.
• “Most of the financial industry is remunerated via the accumulation of assets. … They take a very passive approach. … It's designed not to make you money, but to ensure that you don't lose money and sue them, which means that you never make that much money, right?” (03:13, Julian)
• Contrast between passive, asset-gathering industry approaches and the razor-thin risk mandates at hedge funds.

2. Why Now Is A “Macro Moment”

• Multiple powerful forces are converging:
  • Radical policy changes under a Trump administration—tariffs, immigration, dollar management.
  • Huge international flows into US assets ($20T over 5 years).
• “For all the spin that we get from the politicians, tariffs are just a cute way of applying an enormous great VAT onto US consumers...” (08:27, Julian)
• Brigden outlines why US exceptionalism has been funded by foreign capital and why that’s fragile if the dollar weakens by design.

3. The Risks of Staying US-Centric

• Foreign assets and commodities like gold, silver, mining stocks and non-US equities have outperformed even as US media centers its narrative around S&P and “Magnificent Seven” tech stocks.
• “You are going to underperform by staying invested in the US asset markets. … you are just going to massively, massively underperform. And I think frankly it's part of the plan.” (11:03, Julian)
• Warns US investors may lose 30–40% of their purchasing power compared to investing globally if the administration achieves its objectives.
  • Timestamps: [00:00, 11:03, 12:14]

4. Process: From Macro Thesis to Action—Waiting for Price Confirmation

• Don’t trade just on macro ideas; wait for technical confirmations and flows to align.
• “You can have a thesis, and that's very important… But until you get the confirmation from the price action, it's a pointless exercise trading it.” (13:32, Julian)
• Example: long XME (mining/metals ETF) vs. XLK (tech ETF) as a dollar-weakness play after technical breakout.

5. US Dollar, International Flows, and Currency Hedging

• US-centric bias in the investment industry ignores currency risks.
• Important inflection points coming for the dollar.
• “If and when that [dollar break] does go...I think you'll start to see those cracks.” (18:10, Julian)
• True precious metal bull markets are born of equity bloodbaths, not universal asset bubbles.

6. The 60/40 Portfolio & Inflation Regimes

• The classic negative stock-bond correlation is historically anomaly—reliant on a disinflationary, central bank-dominated era (post-98).
• “I believe that we're moving into … a more inflationary environment. … It just means that inflation is going to be a problem and bonds are crap place to have your cash.” (23:17, Julian)
• Treasurys have been “an instrument of confiscation” when compared to gold since at least 2024.

7. Inflation, Labor Markets, and the New Regime

• Sees potential for a resurgence in inflation depending on policy and labor tightness.
• “We've never really accelerated growth with unemployment in the low fours without creating inflation.” (25:10, Julian)
• Wages drive core service inflation—with little sign AI will solve tight labor market issues quickly enough.

8. The Labor Market Paradox & AI in Context

• “We really haven't seen a situation like this where you've seen a loss of momentum in hiring that hasn't led through to firing.” (26:46, Julian)
• AI is more of a source of uncertainty than actual job displacement (so far).
• AI could eventually transform white-collar work, but societal implications (redistribution, taxation) are underappreciated—“either we live in a lawless society … or someone is getting taxed massively to pay for [universal basic income].” (34:10, Julian)

9. Probability-Based Macro Scenarios

• Assigns rough probabilities:
  • Soft landing: ~20%
  • Recession (with equity market correction): ~40%
  • Reacceleration of inflation: ~40%
• “If we go into recession, I think the trade is pretty clear. You sell stocks... and unfortunately, you probably sell the stuff that you really want to own as well...” (41:21, Julian)

10. National Debt: Catastrophe or Chronic Drag?

• US more reluctant to address debt than Europe; attempts at “financial repression” and running the economy “hot” likely outcomes.
• “Governments have got to play every single trick that they can to slowly boil the treasury investor, … in the pot as they grow themselves out.” (45:20, Julian)

11. Sector and Factor Preferences for the Regime Shift

• In a weaker dollar environment: value outperforms growth, metals/mining, precious metals, commodities, emerging markets come into favor.
• Energy: Watch for technical signals—“you have to kind of wait to get the price signals before you go...” (49:56, Julian)

12. Passive Investing & Market Reflexivity

• 100% agrees with Mike Green’s view that passive flows mechanically inflate the largest stocks.
• Adds macro “layer”: strong dollar inflates US assets via foreign flows; reversal could trigger sharp outflows and market fragility.
• Defines “reflexivity” for listeners: asset buying supports fundamentals, which justifies further buying in a positive feedback loop—dangerous if reversed. (54:40, Julian)

Notable Quotes & Moments

• Macro’s Spotlight Moments
  • “Most of the time it isn't the driving influence, it's supporting actor. But at times it is absolutely the central role at the tops and the bottoms.” (00:22, Julian)
• US Underperformance Warning
  • “You are going to underperform by staying invested in the US asset markets. … I am a little concerned with some of the movements seeing in the markets at the moment. … And I think frankly it's part of the plan.” (10:54, Julian)
• Dangers of Fragility
  • “This is where you make your most money. But I'm not naive enough to think that this isn't. There's an incredible vulnerability here if something does go wrong.” (00:08 and 54:40, Julian)
• Inflation Narrative
  • “The concept that we have defeated CPI, gentlemen, with core CPI at the highest rates in 30 years is, to excuse my French, a bloody joke.” (29:46, Julian)
• AI and Inequality
  • “The only people [profiting in an AI revolution] will be those AI companies. So just ask me what the stock's worth if the tax rate on them is 99%—probably not much.” (34:04, Julian)
• On Passive Flows and Reflexivity
  • “This becomes a virtuous circle or cycle. … But if you get too, too strong a drop in the dollar, the money will go home. … George Soros came up with the concept of reflexivity… the purchase of an asset underpins the fundamentals that justify the price of the asset.” (50:50–54:40, Julian)
• On Individual Investor Lessons
  • “Become a student of the market. Think. Be willing to think independently and understand that this is a… whole industry that is just designed to be a cheerleader.” (60:41, Julian)

Timestamps for Key Segments

• Macro’s role & meaning for investors: 00:00–06:30
• Why macro matters now / secular regime change: 06:30–12:00
• How to convert themes to trades — importance of price action: 12:29–15:47
• US underperformance, international outperformance: 15:47–20:44
• The 60/40 Portfolio, bonds’ changing role, and inflation: 20:44–25:10
• Labor market, inflation, and policy-induced cycles: 25:10–33:12
• AI: impact, uncertainty, distributional risk: 33:12–36:04
• Macro scenario probabilities (recession, inflation, soft landing): 36:04–42:40
• National debt & potential for financial repression: 42:40–46:58
• Sector positioning (value, metals, commodities, EM, energy): 46:58–50:23
• Passive investing & market reflexivity explanation: 50:23–55:11
• Philosophy and lessons for investors: 55:11–62:00

Takeaways for Investors

• Global regime shifts can upend decades-old investment playbooks; anchoring portfolios to US assets alone is especially risky.
• Macro matters most at inflection points—be tactical, seek price confirmation, and be ready to pivot.
• The “everything bubble” in US assets (especially tech) is underpinned by foreign flows and passive investing, but is fragile if flows reverse.
• Inflation and financial repression are likely tools against the debt overhang, making bonds unattractive.
• Value, commodities, precious metals, mining, and international/emerging market assets are poised to benefit from a changing regime but require technical confirmation.
• Think independently; don’t be mesmerized by Wall Street cheerleaders or inertia from entrenched US-centric narratives.